As has been pointed out by numerous folks the the Bank Term Funding Program from the Fed MAY be coming to an end on 3/11/2024. The program is meant to give banks liquidity using certain eligible securities (i.e. treasuries, agency securities and agency mortgage backed securities).
Per the terms and conditions the lending facility MAY end on 3/11/2024–meaning that a bank can get a loan on the named collateral up until that point–afterwards???
The securities are valued at Par for the purposes of the loan regardless of how much they are underwater. Obviously a great benefit to banks, credit unions etc.
The point of this note is to remind everyone that as we come toward March it is probably best to know if any of your bank holdings are taking advantage of this program. Most banks have been disclosing these items in their 10-q and/or 10k.
Note that I know little of the program but ‘just in case’ I will check my few holdings and see if those bankers are taking advantage of it. Just don’t want big surprises.